3 reasons why gold prices will decline further

In fact, gold prices have been moving down in rupee terms here, despite a slight jump in dollar terms abroad.

Gold fell 1.65 per cent in the past two weeks, from Rs 30,300 per 10g on April 28 to trade currently at Rs 29,800 per 10g in Mumbai’s popular Zaveri Bazaar.

Analysts believe gold prices in the short term will fall to trade at Rs 27,000–27,500 per 10g.

If the rupee strengthens further, gold prices are expected to do down to Rs 26,000 per 10g.

During the past fortnight, the rupee rose 1.6 per cent against the dollar, to trade at 59.67 on Tuesday as against 60.64 on April 28.

“The market now hopes for a stable government to come to power, due to which the rupee is expected to appreciate, which will cause gold prices to fall. If the rupee continues to appreciate, gold will see a further drop,” said Naveen Mathur, associate director, Angel Broking.